Mobil Manufacturing purchases a liqid raw material. The material was refined into 3 complete products; neon, argon, and xenon. In the manufacturing process, the 3 products undergo a joint process that has a total cost of $160,000, which includes the cost of the liquid raw material. We learn that 25,000 gallonw of argon can be sold for $45,000 immediately after the completion of the joint production process, without any further processing. 30,000 gallons of xenon are processed in a second department for an extra cost of $66,000 and was sold for $120,000. 60,000 gallons of neon was processed in a third department at an extra cost of $119,000 and was sold for $175,000. Both xenon and neon can be sold at the split-off point for $40,000 and $60,000. Question: Show the allocation of the joint costs among the 3 products using physical unit method, sales value at split-off method, and constant gross margin method.
Mobil Manufacturing purchases a liqid raw material. The material was refined into 3 complete products; neon, argon, and xenon. In the manufacturing process, the 3 products undergo a joint process that has a total cost of $160,000, which includes the cost of the liquid raw material. We learn that 25,000 gallonw of argon can be sold for $45,000 immediately after the completion of the joint production process, without any further processing. 30,000 gallons of xenon are processed in a second department for an extra cost of $66,000 and was sold for $120,000. 60,000 gallons of neon was processed in a third department at an extra cost of $119,000 and was sold for $175,000. Both xenon and neon can be sold at the split-off point for $40,000 and $60,000.
Question: Show the allocation of the joint costs among the 3 products using physical unit method, sales value at split-off method, and constant gross margin method.
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